In the Open-Economy Macroeconomic Model,if Investment Demand Increases,then

question 35

Multiple Choice

In the open-economy macroeconomic model,if investment demand increases,then

• A)net exports and the real exchange rate rise.
• B)net exports rise and the real exchange rate falls.
• C)net exports fall and the real exchange rate rises.
• D)net exports and the real exchange rate fall.

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Definitions:

U.S. Government Securities

Financial instruments issued by the U.S. government to raise funds, including Treasury bonds, bills, and notes, considered low-risk investments.

Money Supply

The summed up worth of financial assets accessible in an economy at a specific moment.

Bank Transaction

Any financial operation carried out within a bank, including deposits, withdrawals, and loans.

Required Reserve Ratio

The fraction of deposits that banks are mandated to keep as reserves by the central bank to ensure liquidity and stability in the financial system.